Iron ore opens 2015 with a bang

On expected line, iron ore opened 2015 with a bang by posting major weekly gain of 5-7% amid speculation that China will take more steps to spur growth in 2015With China is tipped to grow at a rate of 7.4% this year – its lowest growth rate in almost a quarter of a century and by about 7% in 2015, the slower growth in steel consumption amid huge surplus capacities has also put severe pressure on steel as well as iron ore prices in China. And Iron ore prices have tumbled by almost 50% YoYBut there was a spark of recovery last week of 2014 as The People’s Bank of China changed rules to expand the base for calculating loan to deposit ratios starting from 2015 and it is expected that such a revision could unleash an estimated CNY 5.5 trillion (USD 884 billion) of funds and boost investments, in turn increasing demand for steel products and iron ore. The move, which comes just weeks after the central bank cut interest rates, is also seen as an indication that Beijing could step up efforts to stimulate the economy.However, it is expected that the rally may be limited as the steel demand fundamentals in China remain weak in 2015 and most analysts have forecast USD 60-70 CFR levelsIron Ore Fines CFR China